How this calculator works
Expected monetary value multiplies each possible outcome by its probability and adds the weighted outcomes. In a risk register, a 20% chance of a $50,000 cost contributes $10,000 of expected loss even though the loss, if it happens, is much larger. Positive contributions are opportunities and negative ones are risks; the total is what you would expect to gain or lose on average if the same set of risks were repeated many times. It is a decision aid, not a prediction of any single project outcome.
Formula
EMV = Σ (probability of outcome × monetary impact of outcome). Expected gain sums the positive contributions and expected loss sums the negative ones; the two add to the EMV.
Worked example
A 20% chance of a $50,000 gain contributes $10,000, a 50% chance of a $20,000 loss contributes -$10,000 and a 10% chance of a $15,000 gain contributes $1,500. The expected gain is $11,500, the expected loss is -$10,000 and the EMV is $1,500.
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Frequently asked questions
Should probabilities add to 100%?
Not in a risk register. Each risk is assessed on its own, so they do not have to be mutually exclusive. The probabilities sum to 100% only when the list describes every possible outcome of one decision.
How do I enter probabilities?
Enter decimals from 0 to 1, with the same order as the impacts. A 25% chance is 0.25. A probability above 1 or below 0 is rejected as invalid.
How is EMV used in decisions?
It helps compare options with uncertain outcomes, such as buying insurance against bearing a risk, or choosing between projects. It treats all dollars as equally important, so a project with a small chance of a catastrophic loss may still look acceptable on EMV while being unacceptable to the business.